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Look over the market for the year and you now see two roads having diverged
in a yellow wood. But here, pace Robert Frost, the one that has been
MORE traveled by has made all the difference. The big stocks (S&P) have
repeatedly whacked the technology stocks (Nasdaq) for the past month, almost
without letup. As of November 10th, the S&P was up 24.35%, with the Nas
up 23.21% -- a difference of a percentage point. As of today December 15th,
the S&P has risen to 30% while the Nasdaq has dropped to a 19% gain --
an 11-point gap, the widest of the year, and indeed, an unusually wide margin
looked at in the light of recent history.

In fact, the gap is wider than at any point since The Motley Fool debuted
online on that blessed day of August 4th of 1994. The difference between
the indices during our run in '94 was just four percentage points. For 1995,
it was five. And last year, the Nasdaq outperformed the S&P 500 by just
two points. So an 11-point split is anomalous. I suppose it demonstrates
the "safe haven" status of America's largest companies, at least during this
(CLICHÉ ALERT!!!) "Asian flu."

Achoo.

Does it feel to anyone else out there that stocks like 3Com (Nasdaq: COMS)and KLA-Tencor(Nasdaq: KLAC) -- which have suffered
so badly from the recent ague -- are huge buying opportunities right now?
This reminds me of when KLA wilted to $17 back in early 1996. Or when 3Com
wilted into the low $20's earlier this year. The cyclical semiconductor equipment
industry, and the now somewhat more cyclical-looking networking industry,
both are in the midst of unkind market whippings, and history shows that
when these stocks get halved, they are good buys.

I look over the Fool Portfolio today, and I see that we're five points up
on the Nasdaq and six back of the S&P 500. And I look at our three losers,
all down from 22%-26%, and I see solid strong growth companies. There's little
speculation in any of them, except perhaps for Innovex (Nasdaq: INVX)(up $2 7/16 -- Fool winner of the day), which would be vulnerable to
technological innovation rendering the hard drive extinct. (It took a huge
asteroid collision to make dinosaurs extinct 64 million years ago; it wouldn't
take that much to put hard-drive manufacturers out of business, but it wouldn't
be easy, either.)

When we talk about the future of technology, I have an absolute must-read
for you tonight. It's a Forbes interview with venture capitalist John
Doerr, Internet analyst Mary Meeker, the notably Foolish Roger McNamee, and
a fund manager. Anytime you can get any one of the first three to
talk about stocks, you're in luck; getting them all for the same panel interview
is superb. Here's the direct link (and nota bene, most of all, Amazon
(Nasdaq: AMZN)shareholders):

Other notable Fool stocks today were GM and Iomega both rising $1+, and AOL
going the other way, down $1 1/8. Lucent, despite a couple of positive press
announcements, gave up $2 3/16; because it's a spinoff and our holding is
only worth some $3000, it (and its 53% gain) exerts little influence over
the Fool Port. (Sigh.)

Trump Hotel & Casino Resorts(NYSE: DJT) lost another $3/16, dropping
below $7 for the first time ever. New low at the close: $6 15/16.

In my report last Wednesday, "Dump Trump? We're Stumped!" I invited each
of you to mail me your thoughts on what we should do with this short holding.
It's now made us 18% on our money since we went short on the last day of
April.

Given that the company has had nothing but bad news since we shorted, our
question has been whether to cash out at our 20% goal (traditional Foolish
aim with a short sale), OR to hold the thing for more. Within 24 hours, I
had 43 thoughtful responses, some of which I want to share below. But first,
how did the numbers tally?

23 of you told us to cover, and 20 said continue to stay short.

Before my updated word, let me share some of my favorites of yours:

Joel Shaw wrote:
Recently, news reports about Hilton, SLOT, Atlantic City competition and
other negative articles have appeared. With The Donald wallowing in debt
and gaming proceeds declining, the environment that is Trump's business seems
worse now than at the time you originally initiated your short position.
And on top of that, the stock market is traveling down the same path as your
short.

YellowSt@aol.com:
i've been following with interest your speculation in shorting DJT. It's
finally paying off and I think it would be a shame to cash in too soon. Not
only is DJT a highly leveraged money-losing operation, but, most importantly,
its basic business, gaming, is rapidly deteriorating. Overcapacity and the
"Asian flu" have already hurt the likes of Hilton... and Wall Street is souring
on the gamers as the Asian big rollers stay closer to home. My guess is that
DJT will go lower sooner rather than later, especially with tax-loss selling
kicking in now

Bucky Wood:
To be intellectually honest, one must remain true to the principles stated
at the outset. If they were to continually re-evaluate the "fundamentals"
of a company and not allow short term profit (or loss) to influence one's
decision, then you must hold the stock.... [But] please don't disappoint
your "fans" who applaud you more for your principles, intellectual honesty,
consistency, and discipline than we do for your results. Any one can lose
(or make) money. Not everyone demands respect for their honesty.

AGray77303@aol.com:
Stick with your program -- 20 per cent. You advocate it in your book. If
you deviate, then you don't really have a strategy.

RicsAst@aol.com:
I would recommend that you hold on to the short position on DJT. Not so much
as to watch it sink to new lows, but rather to hold it until you have found
a new short position. Part of the Fool Portfolio allows investors to "learn"
different approaches to investing, shorting being one of them.

Keith Garner:
Donald is one of the few people I know who has made, lost, and remade himself
a billionaire. Continuing to bet against him is a gamble that he will not
be able to unload the Plaza, that he won't be able to manage the enterprise
with his current debt structure, and that the management of the company is
weak. I believe the company's management is actually pretty good, the franchise
is valuable, he will likely be able to unload a property, and interest rates
may give him "room" to manage his enterprise even if he doesn't.

DanMcC@aol.com:
It is a sinking ship, leaking badly and weighted down with the ballast of
all the cash Trump has borrowed. Hold on tight and reap the profits.

BMan1395@aol.com:
I was in the stock for a couple of months. I got a pretty good feel for the
situation. I have a number of reasons that I have based my opinion on; I
don't want to bore you with the many reasons. But, I can see this situation
going to zero. I can easily see the Taj boarded up. Not in the short term.
But in the long term. IMO of course.

Jeff and I talked about it more this afternoon, and we've decided to be
contrarians, to side with the minority, and to stay short. Many of
you said, "Hey guys, don't be greedy, take your 20%." The problem is, we
took that same attitude for our most recent Foolish short, cashing out
Quarterdeck(Nasdaq:QDEK) for that 20% gain (actually, 21.78%). That
was at $5 ½, about one year ago today. Where's QDEK now, one year later?
Trading over 800,000 shares today, it's at $1 ½, dear Fools.

We weren't greedy, were we?

Darn it!

Will we hold until the Taj is boarded up? Probably not -- indeed, we may
not even hold that much longer. We do think there's more room to the
downside. This isn't to say we might not cash out next week, if it drops
another point. Who knows? Our decision is ours, and your own (if you hold
a position) is your own. That's Folly, at the very root of it.

Anyway, we do like to let you know our feelings, since that's presumably
one of the reasons you tap in here every day.

Meanwhile, stay Foolish out there!

-- David Gardner, December 15, 1997

Do your Foolish gift
shopping now, in time for the Holidays. And consider the Fool's Industry
Focus '98
book
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